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Trade and the distribution of human capital

In: International Trade Agreements and Political Economy

Author

Listed:
  • Spiros Bougheas

    (School of Economics, University Park, University of Nottingham, NG7 2RD, Nottingham, UK)

  • Raymond Riezman

    (Department of Economics, W360, PBAB, University of Iowa, Iowa City, Iowa 52242, USA)

Abstract

We develop a two-country, two-sector model of trade where the only difference between the two countries is their distribution of human capital endowments. We show that even if the two countries have identical aggregate human capital endowments the pattern of trade depends on the properties of the two human capital distributions. We also show that the two distributions of endowments also completely determine the effects of trade on income inequality. We also look at a simple majority voting model. It turns out autarky and free trade with and without compensation may be the voting outcome.

Suggested Citation

  • Spiros Bougheas & Raymond Riezman, 2013. "Trade and the distribution of human capital," World Scientific Book Chapters, in: Raymond Riezman (ed.), International Trade Agreements and Political Economy, chapter 20, pages 395-407, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789814390125_0020
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    References listed on IDEAS

    as
    1. Giovanni Maggi & Gene M. Grossman, 2000. "Diversity and Trade," American Economic Review, American Economic Association, vol. 90(5), pages 1255-1275, December.
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    More about this item

    Keywords

    International Trade; Political Economy; Theory of International Free Trade Agreements; Customs Unions; Tariff Dynamics; Storable Votes;
    All these keywords.

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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